commentary (2006-28)

Mini Consolidation Steps

Mini Consolidation Steps

by Joe Sullivan

When proponents of a consolidation of city and county governments last pushed the issue to a referendum a decade ago, it was anything but clear how much savings to taxpayers would result.

Voters outside the city resoundingly rejected the consolidation plan. And even some of its proponents acknowledged that combining the two governments might actually add to costs in the short run, but most insisted it would surely lead to efficiencies and economies in the long run.

The political obstacles to consolidation remain high, and any move to resurrect it isn’t likely anytime soon. But the belief persists in many quarters that significant benefits could be realized from combining a more limited set of governmental functions.

Toward that end, Mayors Bill Haslam and Mike Ragsdale named a Joint City-County Efficiency Panel to address such possibilities. And the eight-member panel chaired by County Commissioner Mike Hammond recently submitted a report to the two mayors.

The only one of its handful of recommendations that amounts to much is to bring the city’s separate property collection apparatus under County Trustee Mike Lowe, who as a matter of state law collects taxes for the county.

The city’s costs of tax collections (also including business and beer taxes) are on the order of $1 million a year. Lowe has offered to collect the roughly $90 million in property taxes that represent by far the largest source of city revenues for a fee of .2 percent. That’s only one tenth of what he charges on county property tax collections, and the $180,000 cost to the city would appear to allow for significant savings on its part. Moreover, putting both city and county property tax bills in a single envelope would seemingly convenience taxpayers (as well as save on mailing costs).

Even before the efficiency panel came along, Lowe and the city’s finance director, Chris Kinney, got as far as negotiating a draft agreement on how the nitty-gritty of collections and remittances would work. Lowe terms it, “a no-brainer” and “a proposal the city can’t afford to refuse.” But Kinney has renounced it.

“I don’t know of hardly any companies that outsource their primary source of revenue,” the city finance director says. “We have a fairly new system that’s working very efficiently, and we’ve drastically improved our collections. Moreover, we’ve got six dedicated people, all of whom are tenured civil service employees.”

In an attempt to further sweeten the deal, the efficiency panel has recommended what amounts to a two-year free trial on the city’s part. Lowe has agreed to waive all fees for this period and also employ someone who would have full-time accountability to the city. But Kinney wants no part of it. “We don’t do things on a trial basis,” he avers.

Cynics will say that Lowe is just an empire builder. While there may be some truth to that, the greater truth may be that the city can’t afford to be turf protective when it comes to something that could significantly narrow the gap between city revenue and expense growth that Haslam often frets about.

The only other efficiency panel recommendation that breaks new ground is that the city, the county and the school system address ways to economize on employee insurance, including “the possibilities of the city and county being on the same plan.” But it’s safe to predict that any such address will lead to a dead end. When the school board briefly flirted with the idea of transferring its employees (other than teachers) to the county’s less expensive insurance plan two years ago, there was a groundswell of protest and the idea was quickly dropped. More recently, the city has gone to great lengths to gain employee acceptance for its new health insurance plan and isn’t about to rock the boat.

In other areas, the panel lauds the city and county for collaborative efforts they are already taking. To wit:

“The committee found that the working relationship between the city and the county parks is exemplary….” About the only further step recommended is linking their six golf courses. “Combining the courses under a joint operation would bring several benefits including operations, purchasing, personnel and a better value to the public.”

Where purchasing generally is concerned, the panel was pleased to note that the city and county purchasing departments “meet on a regular basis to identify best practices, joint purchasing opportunities and efficiencies.” There was no notion of trying to combine them.

An area not addressed by the panel where officials believe a combination could yield substantial savings is fleet services. A city department employs 57 people and operates two garages to maintain its fleet of some 1,300 vehicles and equipment ranging from fire engines to lawn mowers. Its county counterpart maintains a like number of vehicles with 21 employees at a separate garage. (One reason it’s so much smaller is that Sheriff Tim Hutchison buys all his gas and oil separately.)

One possibility that’s being explored is to place both of them under the Public Building Authority, which very efficiently maintains a lot of buildings and their grounds for both the county and the city. Taking on fleet services could be a logical extension of PBA’s role.